Shared ownership resale

ale2007

Hi,

I am buying flat through shared ownership scheme on the resale market.
The agent had applied shared ownership mortgage calculator. That calculator limits my affordability.

So in reality my affordability is higher on the open market even including rent on the share and other charges.
The shared ownership affordability calculator used by broker shows that my affordability is a lot lower.

I have done some research and found guidance policy document published on Nov 2015 by Government Cabinet Office, Homes and Communities Agency for Shared ownership, it states:

'Re-sales

The shared ownership calculator is not designed to work in line with re-sales; this is due to the rental calculation and also due to the fixed shares connected to re-sales. We do not wish to cause any barriers to existing shared owners selling their homes.

Back to back sales and staircasing can be done to encourage maximising affordability and increasing RCGF receipts, however it is not a necessity.

Applicants purchasing shared ownership through re-sales should fit the broad eligibility criteria and should also be able to sustain the share they need to purchase. Eligibility is required if purchasing a share in the property, if through the re-sales process the new buyers are purchasing 100% of the title applicants do not need to fit the HCA’s general eligibility criteria. '


So as it says above mortgage broker does not need to use this calculator for resale properties , which is what I am buying.


Does anybody has experience with that?

Is it true that they do not need to use shared ownership affordability calculator for resale properties?


Thanks

yllop1101

I don't think that's what it is saying, although what it IS saying isn't exactly clear either. We're just buying a shared ownership resale, but it's still all dine through the housing association and even though we're buying 100% (simultaneous staircasing) they are still doing affordability checks. It's all very confusing.

Have you checked what your affordability percentage is? You could improve your affordability by asking them to look at a 30 year mortgage term, for example. Also, if you will be living with a second person, the document that you cited says 1/3 of their income can be counted towards affordability too.

Bear in mind, that document is only government guideline, housing associations can choose within those what they follow and what they don't. E. G. My HA don't following the 2nd applicant recommendation, but tighten the affordability to between 30-40% rather than the recommended 25-45%.

kingstreet

You DO NOT use the newbuild SO calculator for resales as the instructions say. Affordability has to be manually calculated.

I also use the Nov 15 HCA Guidelines (page 5) as we are active in the shared ownership sector, newbuild and resale.

The shared ownership calculator is not designed to work in line with re-sales; this is due to the rental calculation and also due to the fixed shares connected to re-sales. We do not wish to cause any barriers to existing shared owners selling their homes.

HAs cannot make up their own rules. The applicant is vetted by the area HTB Agent in conjunction with HCA rules and it is their determination which holds. The HTB Agent would over-rule the HA if necessary.

ale2007

kingstreet whaen you say HTB Agent, do you mean my mortgage broker?

It was my mortgage broker that applied the shared ownership calculator. I have sent them Nov 15 HCA Guidelines and now waiting for the response.
He said that he forwarded my query to HA and is waiting for his response.

tiger_eyes

Not to speak for kingstreet, but Help to Buy agents are regional organisations who assess whether you're suitable for local shared ownership housing. My local agent is Help to Buy South, for example.

kingstreet

tiger eyes is correct.

HTB Agents have Government contracts to manage the social/affordable housing budget and run HTB Equity Loan and shared ownership schemes.

They decide if you re eligible for SO, not the HA.

ale2007

The agent said that he contacted HA and will take instructions from them.
How can I found out who is my HTB Agent and contact them?

tiger_eyes

Here you go: Find your local Help to Buy agent.

ale2007

My housing association has contacted me.

After speaking to HA, I am enforced to say that both my mortgage broker and estate agent are idiots and do not know how to do their job.
They also do not know how read policy documents written in english, despite english being their native language.

HA has said that there is no restriction on me buying more shares and no need to use shared ownership calculator for re-sale.

Thank you for your help